Albania’s government has signed a EUR 100 million loan agreement with KfW and French development agency AFD intended for energy sector reforms.
The second phase of the policy-based loan and separate agreements in support of the energy sector reform in Albania were signed by Deputy Prime Minister and Minister of Infrastructure and Energy Belinda Balluku, Minister of Finance and Economy Delina Ibrahimaj, French Ambassador to Albania Elisabeth Barsacq, KfW Director for Southeast Europe and Turkey Klaus Müller and AFD Director for Western Balkans Region Dominique Hautbergue.
The total loan agreements amount to EUR 100 million, Agence Française de Development (AFD) said.
According to AFD, the loan was made possible by the significant progress achieved by Albania in implementing the energy sector reform, thanks to the dedicated efforts by all relevant institutions in the sector – the Ministry of Infrastructure and Energy, the Ministry of Finance and Economy, the Energy Regulator Entity (ERE), power utility KESH, distribution system operator (DSO) OSHEE, transmission system operator (TSO) OST, and the Albanian Power Exchange (ALPEX).
The loan is accompanied by technical assistance grants from the German government and AFD
The loan is accompanied by technical assistance grants, of EUR 1.5 million from the German government, implemented by KfW, and EUR 1.4 million from AFD, implemented by Expertise France, which provides consultancy services and capacity building for the Albanian authorities, AFD said.
The general objective of the policy-based loan is to contribute to improving the Albanian electricity sector’s sustainability through support for sector reforms and electricity mix diversification towards renewable energy.
The program is structured on four specific objectives.
The first is a healthier financial situation and improved financial sustainability of operators in the sector. The second is the establishment of an electricity market and a gradual tariff deregulation process, aimed at improving trade transparency. Electricity mix diversification and renewable energy development are the third objective, while a stronger legislative and regulatory framework in the sector is the fourth goal.